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Guide to CIDB Malaysia: Foreign Contractor Registration for Market Entry into the Construction Sector

January 4, 2026

The Construction Industry Development Board (CIDB) Malaysia is a statutory body under Malaysia’s Ministry of Works in regulating the construction industry within the country. It’s primary responsibility to ensure all contractors (local/foreign) meet technical and financial standards before operating in Malaysia.

Other key responsibilities are:

  • Skills Development – Provides training and certification for construction workers.
  • Quality & Compliance Enforcement – Monitors construction projects to ensure adherence to safety, quality, and industry best practices.
  • Industry Promotion – Encourages innovation, sustainable construction, and the use of Industrialized Building Systems (IBS).
  • Policy Implementation – Enforces construction-related laws, including the CIDB Act 1994 (Act 520) and its amendments.

 

CIDB plays a crucial role in elevating Malaysia’s construction sector by ensuring professionalism, safety, and competitiveness.

Effective from 20 July 1995, it is mandatory for all contractors, whether local or foreign, to register with the Construction Industry Development Board Malaysia (CIDB) under Section 25 of Act 520 (Amendment 2011) before undertaking and completing any construction work in Malaysia, except those granted exemption under Section 40(1) of the Construction Industry Development Board Malaysia Act 1994 (Act 520).

This guide offers a simplified overview of what qualifies as construction, the licensing scope, company eligibility, and the obligations foreign contractors must meet to operate legally and avoid costly penalties. It’s your starting point for compliant market entry.

Introduction to CIDB Registration

Malaysia’s construction sector is tightly regulated, it is mandatory for all contractors whether local or foreign to register with the Malaysian Construction Industry Development Board (LPIPM) or CIDB under Section 25 of Act 520 (Amendment 2011) before undertaking and completing any construction work in Malaysia except those who are exempted under Section 40(1) of the Malaysian Construction Industry Development Board Act 1994 (Act 520).

Any contractor who violates Section 25 when convicted, can be fined not less than ten thousand ringgit but not more than one hundred thousand ringgit under Section 29. Under Section 30 the Board can through a written notice delivered to the contractor to stop starting or continuing work construction or undertake to carry out or complete construction work.

License Qualifications
Construction, connection, installation, repair, maintenance, renovation, relocation, modification, alteration, refurbishment, or demolition of:

  1. Any building, structure, large building, edifice, wall, fence, or chimney, whether wholly or partially constructed above or below ground level;
  2. Any road, port facility, railway track, cableway, canal, or small airport;
  3. Any drainage, irrigation, or river control works;
  4. Any electrical, mechanical, water, gas, petrochemical, or telecommunication works; or
  5. Any bridge, viaduct, dam, reservoir, earthworks, pipeline, sewer, aqueduct, culvert, retaining wall, shaft, tunnel, or reclamation works, including:
  • Any works that form an integral, necessary, or preparatory part of the activities described in paragraphs (a) to (e), such as site clearance, soil investigation and improvement, earthmoving, excavation, laying of foundations, site restoration, and landscaping; or
  • The procurement of construction materials, equipment, or labour essential for any works specified in paragraphs (a) to (e).

Responsibility & Obligations

  1. Foreign Contractors must comply with the provisions of the CIDB Act 1994 (Amendment 2011) (“the Act”), the Regulations made under it and any terms, conditions or restrictions imposed by CIDB from time to time.
  2. The Foreign Contractor Registration Certificate issued cannot be transferred.
  3. This Certificate allows the holder of the Certificate to carry out only the projects specified in this Certificate.
  4. This Certificate does not allow the holder of the Certificate to participate in a tender for any construction work or to carry out any other construction work.
  5. Foreign Contractors shall not participate in any tender or carry out any construction work after the expiry of this Certificate and until it is renewed.
  6. Foreign Contractors must display the Registration Certificate issued by the Board or a certified true copy of the Certificate by the Board at the place of business.
  7. The Foreign Contractor must display his registration number on a signboard at each construction site.
  8. This Certificate is valid until the expiration date of the project specified in this Certificate.
  9. If the completion date of the project is extended, the contractor must apply to the Board within fourteen (14) days before the end of the period to extend the Registration Certificate. Supporting documents must be included.

Company Requirement

  1. Incorporated under the Companies Act, 2016.
  2. The company’s equity owned by foreign incorporation and/or individuals exceeds 30%.
  3. The minimum paid-up capital must be RM750,000.
  4. Have a tender invitation letter/ service agreement signed with a client.
  5. The company employed at least two (2) Malaysian with a construction-related degree qualification as technical personnel.
  6. One (1) of the technical personnel must possess at least five (5) years of working experience in the construction industry.
  7. The minimum salary of the technical personnel must be RM5,000 and above.

Conclusion

For foreign construction companies, CIDB registration isn’t just a formality—it’s a legal requirement under Act 520. Whether you’re building infrastructure, installing systems, or managing industrial works, operating without a valid CIDB certificate can result in fines, work stoppages, and reputational damage. From eligibility and licensing scope to project-specific obligations, compliance must be built into your market entry strategy from day one.

How XpatMobi Team Can Help

We guide you through CIDB registration, ensure your company structure meets equity and capital thresholds, prepare supporting documentation, and liaise with authorities to secure project-specific approvals. Whether you’re entering Malaysia for a single project or scaling long-term operations, we make sure your licensing, workforce setup, and regulatory posture are fully aligned—so you can build with confidence.

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